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Old 3rd May 2010, 09:15 AM   #1
Davehodgo
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Default Mortgages in Spain

Myself and my wife are currently renting a flat in Spain and are looking to get on the property ladder. does anybody know what is required as far as contracts etc. my wife only has a part time work contract and is not permanent yet and i am paid from the UK. what hoops do we have to jump through? and is it a good time to buy?
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Old 3rd May 2010, 09:25 AM   #2
greytop
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Prices are pretty low right now so it's a good time to get in.
Why not chat to your bank? They'll know your financial standing.
There used to be mortgages available to foreigners, but not sure what has happened since the crash. He will also have a list of repossessions, as I see more and more bank "se vende" stickers around.
You'll probably need at least 20% deposit, plus the taxes to pay and commission charges will add 10%.
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Old 3rd May 2010, 09:57 AM   #3
Legazpi
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As Greytop says, Spanish banks usually give 80% loan to value (LTV) mortgages, so you have to fork out the other 20% yourself. You might find higher LTVs but you'll have to pay higher interest rates. Some banks are only offering 70% LTVs.

This isn't helped by purchase costs (tax, legal fees, etc) of about 10% as well. So you usually need to have put down 30% of the purchase price yourself in order to get a good deal.

I think these (post-crash) days banks ask for up to 6 months pay-slips and may limit the mortgage so that your payments are no more than 30% of your declared income. Basically they're making it more difficult.

Regarding your situation, I imagine it'll be harder to get a mortgage with a Spanish bank because you are paid from the UK, but if you've switched to the Spanish tax system and declared your income to the Spanish tax authorities instead of the UK ones, then you might have a chance.

Whether it's a good time to buy or not depends on your circumstances. If you only want to own somewhere for a couple of years then I would be reluctant - you need to sell at 10% more than the purchase price in order to recuperate those 10% purchase costs. It's one reason why in Spain people don't buy and sell houses so regularly as in the UK.

However if you view it as a long term thing and you can find a good deal then go for it.

Be very careful about buying unfinished developments - because there's a good chance they might stay that way for many years.
Make sure the house you buy is legal - do not use the "lawyer" provided by a developer.

Be prepared to haggle. If you can get a mortgage approved, then one tactic is to go round offering half the asking price to everyone - there's a good chance you'll find a desparate seller.

Developers such as http://www.metrovacesa.com are offering up to 50% off, so don't be shy when it comes to haggling.
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Old 3rd May 2010, 12:17 PM   #4
MrMark
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It may be worth perusing this site http://www.burbuja.info/inmobiliaria...-inmobiliaria/
the equivalent of House Price Crash forum. There'll be the normal quota of tin foil hat mentalists, but you may gain valuable insights into how the locals view the property market
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Old 3rd May 2010, 02:07 PM   #5
Legazpi
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Quote:
Originally Posted by MrMark View Post
It may be worth perusing this site http://www.burbuja.info/inmobiliaria...-inmobiliaria/
the equivalent of House Price Crash forum. There'll be the normal quota of tin foil hat mentalists, but you may gain valuable insights into how the locals view the property market
Thanks - I've always had a soft spot for HPC (including the nutters) so I'll give this one a go.
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Old 19th June 2010, 02:59 PM   #6
Tumbit
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Quote:
Originally Posted by Davehodgo View Post
Myself and my wife are currently renting a flat in Spain and are looking to get on the property ladder. does anybody know what is required as far as contracts etc. my wife only has a part time work contract and is not permanent yet and i am paid from the UK. what hoops do we have to jump through? and is it a good time to buy?
Yesterday's press reported that even the (ex)Spanish Minster for Housing said that now is not a good time to buy property in Spain as prices could fall a further 20% - you could try talking to your Bank Manager and asking them if they have any Rent-to-buy properties that they have in their portfolio of repossessed properties. I have come across some pretty imprseeive deals offered by Banks who are desperate to liquidate their property assests.
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